After suffering a 5.7% drop in Friday's session, BEA Systems is fractionally higher in today's trading. The company's stock dropped after it announced it would let a $17 per-share buyout bid from Oracle (ORCL) expire, stating that such an offer undervalued the company. The decision by BEA Systems prompted outspoken investor Carl Icahn to threaten legal action to prevent the BEAS board from taking any action that would dilute voting by issuing stock, entrench management or derail a potential sale. Icahn noted, I view your public declaration of a $21 per share 'take it or leave it' price as a management entrenchment tactic, not a negotiating technique.

In a entry this morning, Douglas McIntyre posits that BEAS's counter-offer of $21 per share was a negotiating tactic albeit a failed one. It appears that BEA gambled and lost, he says. BEAS must have believed that Oracle would raise its bid to lock in a deal for the company, and the firm is now left with few if any alternatives. Icahn may be able to force a sale of the company, but the only buyer would appear to be Oracle.

In response to Icahn's statements, the BEA Systems board issued a statement saying that they were not opposed to a potential sale of the company, but reiterated its view that Oracle's bid significantly undervalues BEA and that its desired price remains at you guessed it $21 per share. Whether or not a suitor will step up to buy at those prices remains to be seen; as McIntyre points out, the shares of BEAS have not tapped the 21 level since January 2002.